Market watch: Investors decide not to push their luck

Index sheds 150 points owing to expected correction course.

KARACHI: As anticipated, the Karachi bourse was on a correction course as profit-taking was witnessed in overbought stocks after the benchmark index posted a decent weekly gain of 4%. The bourse had been driving uphill for 11 straight sessions.

The Karachi Stock Exchange’s (KSE) benchmark 100-share index shed 0.73% or 150.09 points to end at 20,416.6 point level. Trade volumes shrunk to 324 million shares compared with Wednesday’s tally of 419 million shares.

“The market started the day on a mixed note as investors opted to book profits after a decent performance by KSE in the past few days,” reported Jawwad Aboobakar, analyst at Elixir Securities.

MCB Bank finally ran out of steam to close in the red after rallying 38% in the last nine trading sessions. Pakistan State Oil also remained under pressure since the opening bell with reports of local institutions being net sellers in the oil and banking sector.

On the other hand, United Bank hit its upper lock for a second successive day due to foreign interest.

Accumulation was observed in stocks with high dividend yields and cheap multiples. Energy sectors remained in the limelight as investors believe that the new government’s first agenda will be to address the circular debt, which will result in better cash flows for either directly or indirectly related sectors.

Shares of 385 companies were traded on Thursday. At the end of the day 172 stocks closed higher, 164 declined while 49 remained unchanged. The value of shares traded during the day was Rs8.4 billion.

Japan Power was the volume leader with 35.65 million shares gaining Rs0.46 to finish at Rs3.48. It was followed by Southern Electric with 34.18 million shares gaining Rs0.61 to close at Rs3.18 and Bank of Punjab with 15.55 million shares losing Rs0.8 to close at Rs11.

Foreign institutional investors were buyers of Rs9.05 billion and sellers of Rs7.9 billion, according to data maintained by the National Clearing Company of Pakistan.

Analysts expect the correction to continue and the market to remain volatile on highs with selling to pull down the index to 21,000 levels.

Published in The Express Tribune, May 17^th, 2013.

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